IATA: August flier growth slows

29th Sep 2006

The International Air Transport Association has reported 4.8%
year-on-year growth in international passenger traffic for August 2006, the smallest monthly passenger traffic increase since the end of
2003. The figures mark the fourth consecutive month of declining growth in
passenger demand. International freight traffic rose 4.7%, rebounding from
3.7% growth recorded in July, but below the historic long-term average
growth of 6.0%.

The average load factor for August remained near record levels at 79.4%,
with North American carriers leading all regions with a load factor of
82.7%.

For the first eight months of the year, passenger demand grew by 6.1% and
freight by 5.2% over the same period in 2005. Average load factors for the
period stood at 76.4%.

“A strong revenue environment and careful capacity management are keeping
load factors at record levels. Combine that with a declining oil price and
enormous efficiency gains and the industry may end the year better off
than our current US$1.7 billion loss projection. More importantly, we are
on track for a profit of US$1.9 billion in 2007-the first black number in
6 years. We are moving in the right direction, but nobody should be
rushing to open Champagne for a US$450 billion industry returning 0.4% of
revenues. More change and efficiency gains remain absolutely critical,”
said Giovanni Bisignani, Director General and CEO of IATA.

The Middle East led all regions with August demand growth for passenger
traffic at 11.9% and for cargo at 13.1%. Strong growth in Africa continued
with the region registering 8.9% and 10.6% traffic increases for passenger
and freight respectively. Restructuring in Latin America led to a demand
decline of 8.5% for passenger and a 1.1% gain for freight. European growth
remained stable at 3.5% for passenger and 2.6% for freight.

ADVERTISEMENT

“While the UK terror alert had no clear impact on traffic growth last
month, it did send some strong wake-up calls to the industry. We need
better contingency planning at airports, greater harmonisation of security
measures across borders and governments must take up the security cost
burden. Airlines and their passengers are now paying US$5.6 billion a year
for additional security measures since 2001. These concern national
security. There is no justification to bill travellers for security when
governments assume the burden everywhere but in airports or on airplanes.
Undoubtedly security is much improved. And measures to harmonise security
requirements across Europe are a step in the right direction. But there is
a lot of work still to do on the efficiency of the system, including
harmonising across the Atlantic,” said Bisignani.——-